Dow surges above 24,000 as OPEC extends agreement

Breaking News December 01, 2017 07:01

By Agence France-Presse
New York

2,579 Viewed

The Dow surged above 24,000 for the first time Thursday as the US Senate moved towards approving a massive tax cut package, while oil prices edged higher on OPEC's decision to extend production limits.

US equities once again powered to new highs on the progress on the tax bill on an otherwise mixed day for global equities. Bourses in Paris and Frankfurt declined on the strong euro, while London was weighed down by the pound.

Wall Street remained focused on the upper chamber of the US Congress, where the Senate appeared poised to approve the long-awaited tax cut, moving it closer to implementation by the end of the year.

Republicans in the Senate have so far set aside concerns about the tax bill, including estimates it will balloon the deficit by at least $1 trillion, and have supported the measure at decisive moments to move it towards a final vote.

During the floor debate Thursday, Republican Senator John McCain came out in support of the measure, news that helped lift stocks to session highs.

Many analysts believe US stocks could still climb somewhat further if the tax cut becomes law, after the House and Senate reconcile their versions into a single package, and some are eyeing the S&P 500 at 2,800.

"While the market has definitely run in anticipation of tax reform, there is still some sort of skepticism," said Lindsey Bell, investment strategist CFRA Research.

One of the sectors that gained the most in the US was energy, boosted by more than one percent increases in Dow members ExxonMobil and Chevron after OPEC agreed to keep a lid on output for all of 2018.

The increases in energy equities -- a sector that has underperformed the broader market -- topped those of crude oil itself. Analysts said the agreement was largely in line with expectations.

Pound strengthens

The pound extended its climb against the dollar following reports British and European Union negotiators were close to a divorce settlement deal over Brexit.

That didn't help London's benchmark FTSE 100 equities index, which closed down 0.9 percent. Many companies listed there make much of their earnings abroad, and a high price for the pound depresses profits.

Europe's economic recovery is gathering steam, with eurozone unemployment falling to the lowest level since January 2009 and inflation picking up, official figures showed Thursday.

The EU's official statistics agency announced that the jobless rate in the euro area fell to 8.8 percent in October, with inflation rising to 1.5 percent.

"November's rise in headline eurozone consumer price inflation and the fall in the unemployment rate in October may offer some reassurance to the ECB as it prepares to reduce the pace of its asset purchases," said Jennifer McKeown, chief European economist at research group Capital Economics.

The European Central Bank is starting to wind down the massive support it has given the 19-member eurozone to help it through the crises of recent years.